Tax traps when varying debt

When varying debt terms, consider whether there is a variation or rescission. In either event, there will be a ‘related transaction’ for loan relationship purposes. Can a release be avoided with the old liability being satisfied by the creation of a new obligation? Consider the implications of a new debt under current law and current market terms. In addition, consider the deemed distribution rules. Do the terms of the new debt impose any additional obligations on UK companies which could result in provisions being imposed for transfer pricing purposes?